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Friday, August 12, 2011

No Quick Exit for Eurozone from Debt Crisis

Associated Press

Twenty-one months after Greece triggered financial and political turmoil by admitting it was broke, the eurozone still can't fix its debt crisis.
The reasons: intractable disputes over who will ultimately pay the costs of saving it, and the still-unadressed vulnerability that comes from having a single currency with multiple governments.
One after another, troubled European countries have asked for bailouts: Greece, Ireland, Portugal. Late-night meetings produced hasty statements and new crisis measures.……..
And there's no clear way to make that post accountable to voters _ to avoid the charge of taxation without representation.
Absence of a single state behind the currency "will continue to make the eurozone very fragile," says economist Paul De Grauwe of the Catholic University of Leuven in Belgium…….
"You need a state, and the power of a state, to back a currency. We are trying to design institutions to do that, but it is very difficult because many people don't want to go in that direction."……

1 comment:

single currency with multiple govs is a problem, absent a single state(single gov) this will continue to cause problems. How about also this, multiple currency's and multiple govs..a problem to some..run away, it's the borg collective coming.

add france's gdp release today, huge miss, austerity plans all are waiting and hoping for and basing their ratings and trust on austerity measures are now unsure...if problems then who'll bailout the rest? germany will be lonesome. and this short selling ban, but if no shorts to cover later, no rise in markets later. eye of the hurricane is all